This is where the economics play out. Exercise burns tokens and moves collateral. Close returns collateral after expiry. Refund lets writers reclaim before mint.
Buyer Action
Exercising an Option
If the market has moved in your favor, you can exercise your option to trade at the locked-in strike price. For a call: you pay the strike in stablecoin and receive the underlying collateral. For a put: you send the underlying and receive stablecoin.
What You See
1
Your portfolio shows “Exercisable” on the option
2
Click “Exercise” — the dialog shows exactly what you'll pay and receive
3
Sign in Nautilus (you'll see a “Burning” warning — that's normal, your option tokens are being destroyed)
4
Success: collateral arrives in your wallet, strike payment sent to writer
Screenshot: Exercise dialog
Real examplesrsADA Call $0.15, 2 contracts: You pay 600 raw USE ($0.60) to the writer. You receive 4,000,000 raw rsADA (4 ADA) from the reserve. Your 2 option tokens are burned.
Gold Call $3400, 1 contract: You pay 1,700 raw USE ($1.70) to the writer. You receive 15 DexyGold from the reserve. Your 1 option token is burned.
On-chain detailThe TX has the reserve box + buyer's wallet boxes as inputs, and Token Registry as a data input. The contract validates: isInExerciseWindow (American: anytime before maturity+720, European: only after maturity), Registry confirms token rates, allExercisedTokensBurned (option tokens in all outputs == 1).
Writer Action
Closing After Expiry
If the option expires without being fully exercised, the writer gets their remaining collateral back. This can be done by anyone — no signature needed. The bot does it automatically.
What You See
1
After the exercise window passes, your portfolio shows “Closeable after expiry”
2
Click “Close” (or the bot does it for you)
3
Your collateral returns to your wallet
Screenshot: Close expired reserve in portfolio
On-chain detailThe contract requires HEIGHT > maturityDate + EXERCISE_WINDOW, OUTPUTS.size == 2, OUTPUTS(0).propositionBytes == issuerPropBytes, and OUTPUTS(0).value >= SELF.value - txFee. The singleton is implicitly burned by not being included in any output.
Writer Safety Net
Refunding Before Mint
If you change your mind before the bot mints, you can reclaim your definition box. This is the only settlement action that requires the writer's private key signature — it proves you own the collateral.
What You See
1
Your portfolio shows the definition under “Pending Boxes”
2
Click “Reclaim”
3
Sign in Nautilus
4
Collateral returns to your wallet
Screenshot: Reclaim pending definition box
On-chain detailThe contract guard requires proveDlog(issuerECPoint) AND !isMinted — the writer must prove they own the key stored in R9[0], and the box must not have been minted yet. Once minted, this path is permanently closed.
Key Takeaway
Exercise burns tokens to prevent double-spending. Close returns collateral after expiry — anyone can submit it. Refund lets writers reclaim before mint.